Apple Inc. (AAPL), Amazon.com, Inc (AMZN): A New-Old Monopoly Established?

Apple Inc. (NASDAQ:AAPL) has been involved in a very public case against the U.S. Department of Justice regarding antitrust within the e-book marketplace. The goal of antitrust laws on the books is to discourage monopolies in market segments of the U.S. economy. In the couple of years since Apple entered the e-book market with its iBookstore, Amazon.com, Inc. (NASDAQ:AMZN) had seen a dramatic drop in its near-monopolistic stranglehold market share in the e-book segment.

But while iBookstore has not gained much of that former Amazon.com, Inc. market – Barnes & Noble, Inc. has actually gained the most – it is Apple Inc. that is now facing civil damages in its e-book trial, as a federal judge ruled this week that indeed, Apple had colluded with five e-book publishers to fix market prices for e-books, raising prices in the market to where Amazon could no longer sell its content for $9.999 each like it had when its Kindle Marketplace opened. So now with this ruling, has the Justice Department now opened the door for Amazon to re-establish its monopolistic hold on the e-book market – something that goes against the the very antitrust laws Justice is supposed to enforce?

In a decision that covered nearly 160 pages, U.S. Judge Denise Cote ruled that the Justice Department had in fact proved its case that Apple Inc. had orchestrated a scheme with five major publishing houses (which had all settled with Justice prior to the trial) to have the publishing houses dictate the prices of e-books, rather than retailers. As the houses set the prices – and Apple contended that it was the plan of the publishers all along because they were losing money with Amazon.com, Inc. setting its $9.99 price – it created more uniformity in the marketplace after iBookstore was launched in 2010.

At about that time, Amazon.com, Inc. owned an estimated 90-percent market share of e-book sales. Since the alleged collusion started, the share dropped until now Amazon owns about 65 percent of the e-book market, with Barnes & Noble Inc. co-opting about 20 percent of the market. The Apple Inc. iBookstore has been under 10 percent form most of its existence, according to recent estimates of the market.

Perhaps that could be the reason why Apple Inc. claims no wrongdoing and intends to appeal the decision, even as Judge Cote set an early August trial date to determine the damage award in the case. What is next for Apple?

What are your thoughts? Is the Department of Justice making the appropriate case against Apple Inc. in its antitrust pursuits? Do you think this opens the door for Amazon.com, Inc. to re-establish itself  with an even more dominant market position? Should investors like fund manager Ken Fisher (see his full equity portfolio) be buying Amazon.com stock now? Give us your feedback in the comments section below.